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a market that's worked on stock picking and individual security selection. i think we might be back to the mpy ride here for the next fewry weeks. >> darryl, what about you? are you as worried about the sequester? >> no. i think the skywester is largely priced in. at this point it's a known catalyst. it's been in the market for a while. people know about it, and the reality is that in the u.s. specifically we see economic activity improving in the future and improving more than expectations and a big driver of that is the housing market. housing drives consumption and housing prices are going from linear to parabolic which gives the consumer more power to purchase. >> rick santelli, jump in here for a minute because we're trying to figure out if in fact we are seeing this trade out of fixed income, into stocks, not necessarily happening today, but do you have any read in terms of if this is an actual trend happening? >> well, i think when i look at treasuries, i see we're only up 19 basis points on the year in 10s. i don't think it's an issue.
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i don't see this impending huge selloff in treasuries. listen to the dovishness in europe with regard to a variety of issues, not the least of which is they are worried about a high euro and growth in some of the southern countries. >> yeah. what did you -- >> i do see it playing out in high yield and corporates. quickly if you look at barclays, one-month spread on investment grade or the etflqd, you can see they have lost a lot of ground, and the one that was the best high yield, the next two charts, this is really giving it up, so i think that's the battlefield for maybe some of the nay sayers on treasuries. it's more what they reached for three to eight weeks ago that they seem to be dumping. >> rick, what did you think of mario draghi's news conference this morning, the president of the european central bank, as expected, didn't cut rates, but he was talking the euro lower pretty clearly today, wasn't he? >> oh, absolutely. listen, the foreign exchange group down here is a pretty savvy bunch, and for the last 48
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hours they were typing a variety of things he could say, and every one of those combinations was about how they would get the euro down a bit. germany is probably getting nervous. exports are going to be pressured, so i think this is a huge story and then try to figure out how the yen piece fits in, and you're looking at a big foreign exchange market for probably the rest of 2013. >> what do you think? >> absolutely. it was a mini verbal intervention. not jean-claude trichet. that was an intervention, and the exports are the story for the next part of the year. >> what they are trying to do, lower the value of the currency. >> absolutely. >> improve their exports. that's where they see growth coming. the same strategy japan is using and the same strategy we are using right now. >> absolutely. >> you want to buy exports in europe then? >> it's going to happen. as the growth in asia picks up, as the growth here picks up, if the euro weakens, those stocks
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are going to be picked up by investors, absolutely. >> who was that jumping in there? >> one thing to consider here is that as the euro and the yen go lower, that's actually positive for the u.s. dollar. once again, bringing it back to the u.s. economy, a strong dollar is good for consumption, and consumption 70% of u.s. gdp. that's why u.s. equities in the currency war scenario i think is very accurate and actually look pretty compelling. >> i guess my only concern, getting back to the consumer spending, not seeing wage growth in the country and if we don't see wage growth consumers will have a tough time spending beyond their car or their house. that story has been done and documented. look at restaurants and the malls and look at retailers, it really isn't that strong of a picture so i think, you know, to say that the u.s. consumer is doing great is going to drive gdp. i don't know if we're seeing that. the retail sales numbers weren't that great today. >> i think it's all to some extent forward looking, but your point on income is a fair one.
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at the same time, income or, you know, the wealth of somebody increases with a stronger dollar and a higher home price so there's the income and the balance sheet side of the consumer. >> i guess the question is in terms of the broad economy. we know it's not necessarily fundamentals driving things but more so the federal reserve and the easy stimulus, but have we seen equities come too quickly too far? >> of course they have. of course. january is normally a very good month. you get global allocation into markets, and the u.s. has been a market that has, yes, been underwritten by the federal reserve, but whether you like it or don't like it, it is the cards we're dealing, and it's moved these markets, and the fed will continue if, by the way, the housing market starts to weaken. that is mr. bernanke's absolute stock market, housing market. >> you cannot fight the fed. >> you can't fight every central bank around the world. mario draghi just joined in that underpinning of global growth. >> rick santelli, we were
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speculating yesterday what would be a catalyst? i mean, we all realized this market's come pretty far pretty fast, the u.s. equity market. what would be the catalyst that could start a correction going here? what do you think that could be here? as long as fed is still in this market, they are supporting things right now. >> well, listen. you know, just because we have a bunch of developed economies jumping out of an airplane with all of these policies, there's no guarantee their chutes are going to oh. the biggest insurance we have is that they all succeed or fail together. >> right. >> because, think about it, that's a big issue. i personally think foreign exchange is going to be the battlefield for 2013, and the country to pay the most attention to is going to be japan. >> they have been most aggressive to this point. >> thank you, folks, very much. >> appreciate it. good to see you. >> good to see you. >> markets are coming back still. >> they are, down just about 41 points on the industrial average. investors getting set for another flood of earnings meanwhile. they are coming after the bell.
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that could drive the markets tomorrow. let's go to josh lipton with a preview of what to expect tonight. >> reporter: earnings tonight, all kinds of fun and games, starting with linkedin, the job site that doubles as a social media site and went public just about a year and a half ago. analysts saying based on its history they are more likely to beat the missed earnings guidance but big expectations on this one. analysts looking for revenue growth of 50%. next up, coinstar, operator of red box video rental kiosks. revenue supposed to climb about 11%. according to one report, action in the options markets suggests a move to the upside more likely than had a move lower on earnings. hasbro, the game-maker. analysts here focused on quality of earnings, and also its board game business, including games like monopoly and clue which you might want to pick up ahead of the big nor'easter headed our way. board games make up a quarter of total revenue for the company, and final act vision, the
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entertainment software company announcing earlier today, by the way, that they had signed a multi-year deal to produce teenage mutant ninja turtle themed video games. i don't know about you, but i'm excited and tonight analysts will be watching two key factors. subscriber numbers for world of war craft and full year 2013 guidance. assumptions are that it will be down year over year. back to you guys. >> in fact, you're playing the game right now. >> got the ninja turtle thing going on. >> all the way. >> 50 minutes left before the closing bell sounds. a market that's lower, down 46 points on the dow jones industrial average, well off of the lows of the session. >> i don't know if we can finish positive today that. was a big hole we dug this morning. we'll see, we'll see. the president today calling for a grand bargain in an effort to avoid massive spending cuts scheduled for march 1st. the sequester we were talking about, gop senator rand paul will be here to respond to that, among many other things. >> and the major markets on
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track for its first weekly loss of the year. we'll talk to some market pros if this is a speed bump in the rally or something more. >> plus, legendary investor jim rogers, lo loves it when we say that, here feeling bearish. just took a short position in a very popular investment. we'll tell you what it is later on the "closing bell." all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.
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welcome back. automatic spending cuts due in three weeks known as sequestration. that's the flashpoint in washington today, and it may soon be a flashpoint on wall street. the president today warned that the gop, the cuts that are coming from the gop, would hurt the economy. he said he is still hopeful for a bigger deal to address the debt and the deficit. >> a lot to talk about with our next guest. reaction from capitol hill from kentucky republican senator rand paul. we welcome you, snofrenator. do you think we'll get a deal on the sequestration issue before march 1st? >> you know, all these people carping about sequestration being harmful to the economy. that would presume that the
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government creates wealth by spending money. i think that's a ridiculous keynesian notion that's been disproved for the last 40 years. so i think cutting spending is precisely what you should do to spur the economy. when money comes to washington and it's spent, that's how it's disruptive and spent inefficiently. let's leave that money in the marketplace. >> are you saying you want to see the sequester happen? >> the sequester barely cuts any icing off the top of the cake. spending is going to rise $9 trillion over the next ten years. the sequester takes 1 trillion off of that. spending still goes up $8 trillion over the next ten years. that's why bowles/simpson said we need 4 trillion and why people like me say freeze spending. you know what a freeze in spending would be, that would considered to be a 9 trillion cut if we don't spend more than we're currently spending. >> want to get back to the sequestration in a moment because it's an interesting point that you bring up, but the way sequestration is scheduled now it's throwing darts. we don't know what missions are
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going to get impacted by the cuts in defense. first your reaction to what the president said today. listen to this. >> they recognize that the sequester is a bad idea, but what they have suggested is that the only way to replace it now is for us to cut social security, cut medicare and not close a single loophole, not raise any additional revenue from the wealthiest americans or corporations. >> we have an ideological cass many here. >> the president wants more ref, new senator. what about that? >> here's the thing. you've got a president who is not willing to lead or save social security or save medicare. they are both bankrupt. social security spends and gives out more than comes in. medicare gives out $3 for every dollar that comes in and he's taking them off the table and accusing republicans of wanting to cut them. we're the ones who want to save the entitlement programs, but they will only be saved by reforming them. he takes them off the table and
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says oh, let's go squeeze more money out of rich people. it really -- it boggles my mind that we could have elected a president that is so out of touch that he's going to continue to play these old kennards about oh, republicans don't want to save the entitlement. we're trying to save entitlements. >> this is the reality. he wants more revenue so what are you going to do? >> he was re-elected. >> yeah, and it's a mistake to re-elect him and it's also a mistake to squeeze more money out of the private economy. that's where jobs are created. i want to leave more money in the private economy and send less money to washington. he wants to do the opposite. he's wrong, and he's why the economy is languishing because his policies are wrong, and they have been wrong for a long time. >> i wanted to ask you, apparently at the democratic retreat he also according to sources said he wanted to spend the next couple of years making sure that the democrats can take back the house and put nancy pelosi back in the speakership there. sound like we'll have a fun next
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couple of years. what are your thoughts? >> i'm not real excited about seeing nancy pelosi speaker again. i don't think that will happen. i think americans are going to wake up. when americans discover how bad obama care is and when obama care starts bankrupting state governments, i think you're going to see a huge rebellion against this president and his policies. >> but when -- when are they going to figure that out, senator? we've been talking about obama care for a long time now, and it's already costing businesses, you know, enormous amounts of money and stopping them from hiring any new headsed to the payroll so when are we going to figure this out in your view? when do you think that happens? >> when republicans begin to present our message better and we tell people whether you're rich, poor or middle class you'll have more jobs and more money if we leave money in your state, leave money in your pocket and that's how the economy will grow. when people figure that out, i think they will come back to the republican party, but they also have to see that what he's planning for us is -- it is
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bankrupting us as we speak. we're borrowing $50,000 a second and it can't go on. >> i didn't know it was a second. >> let me ask you about one other issue before we let you go. this is a pet project of your father's for years. he wanted to audit the federal reserve. he introduced legislation. in fact, it passed the house last year as you well know. you're reintroducing this now in the senate and representative brown is doing it in the house right now. i can understand wanting to audit a federal reserve under alan greenspan or under paul volcker years ago, but now you have ben bernanke who has made the fed more transparent. he's got these news conferences going. they have opened up the minutes. i mean, what is it that you don't know about the federal reserve that you'd want to know by auditing their books, an independent agency, by the way? >> i think people need to know that the federal reserve has probably been the biggest culprit towards the worsening of the business cycle that we've had. we have a much more disruptive business cycle than we've ever
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had before the federal reserve. people need to know that interest rates, the price of money, needs to fluctuate like other prices and when the federal reserve sets the interest rates, it incorporates and brings in these massive boom/bust cycles, the housing bubble being the most prominent of these, and that the federal reserve needs to be scrutinized. it needs more scrutiny. >> what would an audit accomplish though in that regard? >> an audit would let us look back at the policy, a look-back thing, year-old data but would allow to us see what's doing. there are still some things unknown about what went on. some people say as many as $7 trillion worth of money was trading around during the banking crisis of 2008. i think people deserve to know about it. this is an agency that's a quasi-government agency but we, the taxpayers, deserve to know more about how it's being run. >> senator, final question here. what are you going to do in these next couple of weeks to ensure that the president does not take this fight to the public which seems to be what
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he's doing once again, pushing the republicans in the corner, that it's your fault and your colleagues' fault that we're going to see the sequestration, we're going to see all these cuts come because you have not had a plan, and you refuse to raise more revenue. what are you going to do? >> i can't stop him from continuing his campaign. he didn't do so well in my state. 39% of the people agreed with his rhetoric in my state so what i'll keep saying is taking more money out of kentucky and sending it to washington is a big mistake. it's not going to help your son or daughter getting out of college to get a job. in fact, we're losing 1 million jobs a year because of this burden of debt, and he just wants to add more to it. it's a mistake for the country. >> we'll leave it there. good to have you on the program. appreciate your time tonight. 35 minutes before the closing bell sound for the day, a market down 50 points on the industrial average. >> so, what could make google and yahoo! make a deal? i mean, aren't they bitter rivals? right? well, this you got to hear. plus, which stock is more likely to make you money right now? we'll look at that trade coming
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up. >> and then what is jim rogers shorting right now? he is sharing that information with us next. plus, we'll get his take on the recent run up in stocks. back in a moment. and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company."
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no they don't. hey son. have fun tonight. ♪ ♪ back against the wall ♪ ain't nothin to me ♪ ain't nothin to me [ crowd murmurs ] hey! ♪
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[ howls ] ♪ e well, it turns out yahoo! strategy to drive revenue growth
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apparently involves a deal with rival google. julia boorstin explains for us. julia? >> reporter: well, bill, they are not rivals. they are frenemies, and they are teaming up. yahoo! will begin using google's massive map network to show contektural maps. yahoo! will be able to deliver more targeted ads to its visitors. users won't notice a difference. this is a change to the back end. the ads should be more effect you have. google will take a cut, but yahoo! will get the majority of the ad revenue. this should be a win-win, but analysts say since yahoo! needs the help it will benefit more, and it will now be able to focus its energies on creating content and on a small number of ad partnerships. >> thanks so much. which stock would make you more money if you bought it right here, yahoo!or google? we want to do talking numbers. technical side of the story,
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richard ross with global technical strategy and on the fundamentals jeff kilberg founder of kkm financial and a cnbc couldn't boughtor. gentlemen, good to see you. thanks for joining us. >> maria, how are you? >> interesting story here, this pa partnership. would you buy either stock here on the heels of the fundamental story? >> well, maria, certainly feels like valentine's day is getting pretty close as we do see yahoo! and google connect, but i like google. let me lay out the case why i like yahoo! more. marisa myer, folks have underestimated her and i really think she's turned around the company in the last seven months. keep in mind, she was stanford university graduate, two degrees, and she specialized in artificial intelligence. that artificial intelligence specialization allows her to sell mobile in cross-displays and conversely why i do like google, and actually liked it
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before the earnings number, it's overstretched. one of the things driving google is people falling out of love with apple that's really overextended its multi-year high on google. looking for a big pullback on google and get into yahoo! right here against the 50-day moving average. >> so, when you look at the charts though, i mean, they are both looking pretty good. we're looking at google right here. do you think it's extended? >> let me take the baton from jeff there since we're breaking down the charts. i think google is the stock to own. the quintessential tech stock for 2013. you've seen the well-defined trend channel to a fresh all-time high here above 770. i think this stock trades 1,000. now on the flip side, you have yahoo!. this stock up 29% since marisa mayer took over. it's the quintessential
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formation. you'll test the neckline support and could see the 200-day moving average down around $17. >> i disagree that. 50-day moving average, if you look on the chart, it's held nicely for yahoo!. they are finding other areas to engage their customers, and they are going to exploit that and actually pick up revenue. the google relationship, a perfect example. really going to help yahoo!. seen a 2% boost and yahoo! they have a proper plan and are able to extract money out of china and the ali baba situation, a very rare situation. i think they are on the right path. google, at 6.98, not too long ago. 6.98, a substantial move. too much too fast. >> i think google is throwing a bone to one of its former employees, employee number 20. that's great it's a feel-good story but at the end of the day they are the 800-pound gorilla. what am i supposed to do, ask jeeves now? >> i think you've got to buy
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google on a pullback, but yahoo! rk they will get back to that price nearly ten years ago. frustrating owning this stock, but i think yahoo! has the upside momentum here, not google. simple as that. >> what's the catalyst for yahoo! though? >> i don't think there is a catalyst. >> yeah. >> it's continued revenue. continued revenue streams, maria. they will continue to explore and like i said artificial intelligence. don't bet against marisa. >> a sharp cat. >> a compliment. >> dow holding steady, down 50 points. was down 134. definitely has come back. we'll see if we can make more progress as we head towards the close. >> take a look at europe. is the next problem for the market the housing market? up next, president reagan's former budget director will be here explaining why he's warning of a new housing bubble and why that could send the stock markets south all over again.
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>> and a major snow storm set to blast the northeast making its way along the northern plains right now. tomorrow, predictions are literally all over the map. some say 3 inches. some say 3 feet. maria has her own forecast. >> so do you. >> some say power outage. it's going to be a mess, we know that. tracking the storm's latest movement and how it could affect your money coming up on the "closing bell." tdd#: 1-800-345-2550 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 hours can go by before i realize tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily. tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way.
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welcome back. our next guest is a private equity expert who worked with solomon brothers and was with the blackstone group and also with the office of management and budget with the reagan administration. >> david stockman, of course, believes we're now in a new housing bubble, a bubble in danger of popping as soon as the fed stops stimulating the economy. his new book is out in a few weeks. it's called "the great deformation: the corruption of capitalism in america." also with us is diana olick who reported on the worries of a new bubble earlier this week. good to sigh both. david, how is it possible a few years after a devastating recession that devastated our housing market, how would it be possible that we're already in a
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bubble again in your view? >> it's just starting, but the fed is a serial bubble machine, and i think we're entering housing bubble 2.0. there is a flood of fast money coming into the housing sector from wall street, and we have absurdly low mortgage rates on main street, and you put those together, and they are lifting the market rapidly right now, but it's not sustainable. when interest rates reverse and begin to normalize, the fast money will scatter as fast as it came in, and then i think the bubble will splatter because there won't be natural buyers left in the market as interest rates go up. >> but, isn't it -- i mean, isn't the point to stabilize the market so that it's on a more stable footing before we actually see rates rise all that much? that's why the fed has said they are going to keep rates in place until 2015. >> well, i don't know what the timing of this is. i just know it's absurd to take
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the mortgage rate on 30 years from 5.5 where it was in late 2008 to 3.3 where it was just recently. what that does is increase the buying power of someone who has a mortgage or who can spend $1,000 a month on a mortgage by 50%, from 225,000 to 300,000. it's created artificial demand, but we can't keep interest rates this low for a long period of time, because after inflation and taxes, 30-year money is earning nothing. it's been a huge mistake, and once interestes start to rise. >> right. >> where are the buyers going to be? >> but, david, is it really about the interest rates right now, or is it, i agree with you that there's a bubble definitely, but i think it's driven by the investors getting in there, the hedge funds, the private equity pouring millions and billions of dollars into distressed properties. that's what's pushing prices up
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in the double digits in phoenix and las vegas that's creating these bubbles that i agree are unsustainable. if private equity agrees to pull out suddenly, and i'm not sure they will, because they want to get that rental demand, but if they pull out, isn't that the problem and not so much the mortgage rates? >> two points. one is they are riding into scottsdale, arizona, not on the back of a john deere lawn mower, but they are riding in essentially on a hoover vacuum cleaner sucking up all the inventory and driving prices up and hoping to attract the doctors, dentists and chinese so they can get out. >> what would you do if you're ben bernanke then? how would you counteract what you see as this bubble right now? what would you do in. >> i would confess that you are now in the bernanke bear trap because when they came in in early '90s, interest rates were 7%. the fed took them all the way down to 1. the fast money made a killing on the s&l busted real estate, and
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then in 2001 they did it again, when interest rates went from 6 to 1 in the early 2000s, but now we're starting at zero. there's no place for interest rates to go except up, and that means that the buying power of the first-time buyer, you know, buried in student loans or the trade-up buyer who is now retiring is going to be a trade-down seller won't be there as interest rates rise, so i think -- >> when do you expect them to rise? what would be your best guess as to when rates actually start moving? >> i think they have to start moving up over the next one or two years. we're getting into a currency war all the way around the world as a result of all the central banks keeping money rates so absurdly low that it's not sustainable and it's creating a dynamic that really cannot hold for very much longer. >> diana, what about all of the inventories still to come to market that's on bank books. you've got a lot of foreclosed
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property that they want to unload but they are not doing it all at once because they don't want to crash the market. >> there is an overhang. you're talking about 5 million properties that are either in some stage of the foreclosure process or are currently delinquent. those are coming through the banks at a much faster clip as we finally got past all the robo signings and all that >> you can't have a bubble if we have all the supply. >> we don't know how fast the supply will be. the banks have been real tricky, saying they are putting them out but shadow inventory is being held on the bank. again, investors are out there waiting for this supply. the question is i have to say how long will they keep on the investments? is it that rent to own, the buy to rent phase that they are reaping so much reward, or once the prices that we saw jack up 8% last month, that's just crazy, the historical is 3% to 4% in any good times, if we continue to see that and investors say, wait, i'm never going to get the returns like
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i'm seeing right now and they dump those properties, that's a lot worse than the banks dropping the foreclosures. >> that's the big point. the big fast money funds from wall streets are not natural owners of single-family homes in scottsdale, arizona that has gardens, lawns, crab grass and trees that infested with bugs. therefore, they are no economies of scale. they are doing nothing but bringing in cheap fast money and if they think that the interest rates are going up and the cap rate is going up, they will get out as fast as they came in. this isn't good news. it's bad news. >> we'll leave it there. good to see you both. >> we're in the final stretch of trading here. 20 minutes before the closing bell stounds. market steady, down 50 points. >> former treasury secretary robert rubin issued a dire warning about looming across-the-board spending cuts. >> the sequester itself a terrible, terrible piece of legislation. it arbitrarily cuts defense and non-defense without trying to
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thoughtfully do so. >> but not everyone thinks it would be bad for the nation, including a former top official at the fed. we have that debate still to come. and later, the always straightforward jim rogers says this market is not for real. he is buying other things but not stocks. we're going to find out what. stay with us. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
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welcome back. breaking news on apple right now. over to scott wapner. scott? >> reporter: thanks so much. yet another new development in the battle between david einhorn and apple. apple has just released a statement saying in part they will thoroughly evaluate green light capital's proposal. we welcome green light's views and the views of all of our shareholders. apple also goes on to say that apple's management team and board of directors have been in active discussions about returning additional cash to shareholders. at the end of the day that's what this is all about. apple is sitting on more than $130 billion of cash. more than one-third of its market cap in cash. david einhorn and other investors are urging apple to do something with it, whether it's raise the dividend, buy back stock or in mr. einhorn's case urging apple to issue preferred stock. what makes it all interesting is
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that earlier today on "squawk box" iron horn revealed that he is suing the company and asking shareholders to vote against a proposal in apple's proxy that would limit the company's ability to issue preferred stocks, so apple at least is taking this seriously enough, guys, that they have released a statement mentioning mr. einhorn's efforts by way of green light capital and going further by saying that the management team and board of directors have been in active discussions about returning additional cash to shareholders, so a very interesting new development in this ongoing story, guys. >> more of an example that this is not steve jobs' apple anymore. that's for sure. >> stock up 2%. big move there on that move. scott, thanks very much. despite the comeback being staged this afternoon among the major averages, we're still on pace for the first week over week loss for those averages this year. josh lipton has more details on that. josh? >>. >> reporter: hey, bill. u.s. stocks on track to finish
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in the red today, so is this the correction we've been expecting? money managers have been warning of a pullback. even bulls think we could see some consolidation of recent gains. their concerns, one, bullish sentiment is still high at 42.8%, still above its historical average which could be a contrarian sell signal and you should take a look at the s&p 500 and the high shars, high field index. also spoke with jason lee of jpmorgan, he's actually watching high yield spreads. he said they widen around the equity selloff. since father 28th they have widened 30 basis point. lee is paying close attention but isn't worried yet. spreads widened at least 50
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basis points. and if the major indices finish the market lower they are still solidly in the green. back to you, guys. >> thank you. there are a few minutes close, no why what i'm saying. dow down 134 points so quite a comeback this afternoon. >> our next guest is one of the market's biggest bulls and why he thinks the market can't stay above 14,000. more on that next. >> and david ironion going after apple's massive cash hord but apple is not buying. are there secret plans for movement of some kind and could we get clues from the memo they just issued? we'll take a look at that coming up. ♪
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despite the lunchtime rebound we saw in stocks, major averages are on pace for their first week over week loss. the market looking for clear direction, that's pretty clear right now. is the next leg up or down, we wonder. >> joining us now is thomas lee of jpmorgan along with cris
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hizey of u.s. trust. tom, you've been right about this market over the last couple of years. what do you think is happening? is this market getting ahead of itself? >> i still think we're in a bull market so i do think everyone needs to be basically long stocks but the rally we've had for the past couple of months is definitely maturing so i think people need to be careful about timing. i don't know if today is a great day, if you're all in cash, not a great day to go 100% long stocks. >> will we be able to buy at better prices? >> that seems to be the consensus because we've come out of the gate so fast. 3% to 5%, a comfortable number to say. if you had to look back at some of the bumps in the row, they would buy on dips and the same thing occurs this time and europe has been a little quiet and with that coming into the fold, i think a little bit more of a correction is in the cards and certainly something better to pick up.
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>> what would be the catalyst that would spark that direction in your view? >> europe has been a little quiet. europe pointing to the sequester and pointing to the continuing resolution. we know that. it's well talked about, but europe has been a little too quiet here and that catalyst could be rising. >> just today mario draghi, head of the ecb, they didn't cut rates but he's talking the currency down. >> something that usually happens when someone enters the grand experiment that has been in the grand experiment for a while which is japan. >> what happens to the leadership in this market if in fact we have a problem in europe and people start worrying about a european bank, people start worrying about the european issues hitting the u.s. market. what do you think is the most vulnerable? >> you know clearly global cyclicals would be a big risk. one of the things we've noticed is small caps have been doing fantastically. >> russell 2000, you know, all the russells are doing so well. >> i think we're seeing a small
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cap cycle under w which plays to economy strengthening. if investors want to put money to work, small-cap stocks are pretty attractively valued. >> what about you? >> completely agree. the small caps, earnings growth is significantly better than the emerging markets. it's a nice thing to talk about emerging market growth and we're still overweight emerging markets but the small cap arena feeds directly into where job creation should be the next couple of years. >> interesting small caps should be doing so well. >> god for stock picking as well. >> happens early in the stock market special. >> the reason we're sort of seeing this early cycle play is because europe i think is sort of bottoming and china is emerging from weakness, and i think that's helping sort of this early cycle play. >> just today the xlf, the financial stock index hit a four-year high. is it too late to play the financials here, or is there more to come, do you think in. >> it's not. when you look at price-to-book
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value, you lock at what's driving the small caps and driving the financials, it's housing, and the housing turn is for real, and it will take a lot longer but that's a good thing. we don't want it to take quicker to get back to where we were. want to get back to the early mid-1990s type of demographics right-hand housing. >> interesting you say that. we just talked david stockton and he said, look, all of the stimulus by the federal reserve is manipulating the market, and it's basically pushing the market higher and when the stimulus goes away and rates creep up, housing is going to take a pretty big step lower. do you agree with that? is this all manipulation? >> if the fed stimulus created the echo boom and the pent-up housing and all the people living in basements i would say so, but i think there's a real sort of underlying demographic story about this sort of echo boom, a lot of pent-up demand
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for housing and it will lead to housing starts hitting that 1.5 to 2.0 million level and it's really not from fed stimulus. >> housing and tom is right. housing is an affordability issue. it's a little bit of interest rates. it's a little bit of cost and how much you can put down and your overall wealth and what we've seen recently is wealth is back to almost the peaks in 2007. >> gentlemen, good to have you on the program. >> thanks for having us. >> up next, the closing countdown. >> linkedin earnings are expect the after the bell. analysis of those numbers you won't see anywhere else. >> and get red for jim rogers. the legendary investors is not a believer in equities but he does see an opportunity outside of stocks. stick around. jim rogers is coming up. at 1:45, the aflac duck was brought in
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with multiple lacerations to the wing and a fractured beak. surgery was successful, but he will be in a cast until it is fully healed, possibly several months. so, if the duck isn't able to work, how will he pay for his living expenses? aflac. like his rent and car payments? aflac. what about gas and groceries? aflac. cell phone? aflac, but i doubt he'll be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a get-well card at
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siemens. answers. [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees. ♪ it's not rocket science. it's just common sense. from td ameritrade. two minutes before the close. a quick recap of the day. the selloff this morning led lower after mario draghi was talking the euro down. our markets follow the euro. euro goes lower. our stocks go lower. we came back this afternoon. the dow is down 50 points after
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having been down 134. the more interesting story. apple fighting back at david einhorn a little while ago and look at this, the stock is up 3% at $467 and look what it's doing to the nasdaq. the nasdaq sharply lower on the open this morning. it's almost turning positive, down five points right now. after the close, we've got earnings among others coming from linkedin which is lower right now by 1.4% and hasbro which is up 1.25%. ben willis, this market still going. feels like it wants to go up. >> absolutely. >> as tom lee just say this is a mature rally right no. >> the bull is getting kind of tired. i don't know how you want to look at it. put on a great performance, but a great example of the importance of currencies in the world market. once again when the euro started to come off the dollar rally that took us off our lows today but i would agree with mr. lee, got to look for a correction somewhere. >> what's the next catalyst for you? what are you looking for? a lot of earnings still to come.
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>> most of the big ones are out of the way. cpi from china tomorrow when we come in. >> inflation number overnight. >> very important for the asian markets and the world economy as far as i'm concerned. much more important to me than europe for the most part, but that being said, i don't think we need that much of a catalyst for the slight pullback, 5% is what i'm looking for before we go higher. >> very good. thank you, ben. good to see you. >> we're going out well off the lows of the day on the dow and the naz dac down 4% with apple climbing by 3% at this hour. stay tuned for earnings of linkedin and hasbro and jim rogers, what's he buying these days? we'll find out on the second hour of "closing bell." and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo. stocks paring steep losses. see how we're settling out on the day.
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the dow industrials down 34 points. the finished today. nasdaq down about 3.33. as you can see virtually coming back from the lows of earlier in the day. s&p 500, they are down three points at 1509. has the rally finally come to a halt. many have been calling for a pullback in this market including our next guest, nathan bachrach. jim le camp and jeff cox. thanks for joining us. >> ben pace, let me kick this off with you. seeing the declines in the market and seeing a slow creep lower. do you think this is the start of something bigger? >> it could be, maria. what you have though is a market so many people are looking for selloffs and a lot of cash still on the sidelines that when it comes down at the beginning of the day that last hour, last two hours has been boss tifrks and we saw that again today. it came back a little bit.
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so, yeah, i think it's getting toppy right now. we thought so two or three weeks ago. waiting for a 5% to 7% pullback, but no doubt the fundamentals have improved, even in january, and so we wouldn't wait for too much of a pullback here. >> does everybody on the panel agree it's getting toppy? anybody disagree? >> no. i think it's getting cheap, and i think it remoointsz miinds me, instead of a yo-yo, have a yo-yo which is moving up and down and the ramp doesn't have a lot of altitude to it, maria. >> not only that, maria, you've got -- >> what are the metrix that you look at that makes you feel that this is getting toppy here? what's most important that is an indicator of that? >> i think, maria, when you just look at the percentage of companies that are overbought right now, we're over three-quarters of the s&p 500, is in overbought territory. i think this is just basically seasonal action happening. we had a strong january.
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february is historically one of the market's weakest months. what you want to look at. what davidinion did is very significant, demanning apple put some of its cash to work. that will be a major trend in the market, going forward and investors saying no more good, hoard your cash. we want to see it put to work. >> wouldn't that be a positive if apple starts paying out more money to the shareholders, doesn't the stock go up? >> i think that would be very positive. i doubt whether the companies will actually go ahead and do it. i think there's a lot of fear as far as the economy goes, with the forecast we're getting out of fed and some of the metrix that i don't know if companies are going to be that confident to step off the cliff there and start committing that money. >> that's putting capital back to investors, and that might be good for the stock, but that doesn't get apple going out and making a big purchase or have apple being dynamic. >> doesn't mean it's a growth

Closing Bell
CNBC February 7, 2013 3:00pm-4:00pm EST

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

TOPIC FREQUENCY Us 14, Google 13, U.s. 11, Europe 9, Jim Rogers 6, Aflac 4, Washington 4, Mario Draghi 4, Apple 3, S&p 3, David Einhorn 3, China 3, Obama 2, Hasbro 2, Arizona 2, Scottsdale 2, Josh Lipton 2, Siemens 2, Ben Bernanke 2, Rick Santelli 2
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